BlackRock’s ETF acquires 3.25% of Bitcoin supply as fresh capital dwindles

BlackRock’s Bitcoin ETF Approaches $70 Billion in Assets

BlackRock’s Spot Bitcoin Exchange Traded Fund (ETF) is nearing the $70 billion milestone in managed assets, which suggests significant institutional interest, even as retail inflows seem to be slowing down.

The asset management giant has accumulated about $69.7 billion in Bitcoin (BTC) through its ISHARES BITCOIN TRUST (IBIT) ETF.

BlackRock’s IBIT ETF holds a commanding 54.7% market share among all US Bitcoin ETFs, which collectively account for 6.12% of their existing Bitcoin supply, according to Dune data.

This milestone comes within a year and a half of the emergence of Bitcoin ETFs, which officially began trading on January 11, 2024.

Interestingly, this achievement unfolds alongside a consistent positive trend in the ETF market. The US Bitcoin ETF recorded its eighth consecutive day of net inflows, bringing in $388 million in Bitcoin just on Wednesday, as reported by Farside investors.

IBIT has positioned itself among the world’s top 25 ETFs based on managed assets.

Now ranked as the 23rd largest ETF globally, BlackRock’s fund competes with both crypto and traditional financial products, according to data from Bettafi.

However, some analysts believe that the surge in ETF demand may be tempered by profits being taken by miners who are selling their Bitcoin. “Breakouts might need new catalysts and emotional shifts,” noted Nexo analyst Iliya Kalchev, explaining that there is currently more supply being absorbed than is being produced by miners. He also mentioned that corporate financial strategies and accumulation by large investors seem to counterbalance those profits.

High-Value Investors Drive BTC Transactions

Onchain data from GlassNode illustrates that significant value transfers dominate Bitcoin network activity. Although the total number of transactions is on the decline, the average transaction size has risen to $36,200.

“This trend shows that large entities are continuing to utilize the Bitcoin network, which means that despite a decrease in overall activity, the amount processed per transaction is increasing,” stated a GlassNode report released on Thursday.

Furthermore, transactions exceeding $100,000 now make up over 89% of network activity, reinforcing the idea that high-value participants are becoming increasingly influential, according to GlassNode.

As these major players accumulate Bitcoin, there seems to be a decline in new retail investors entering the market.

Short-term holders of Bitcoin have decreased to 4.5 million BTC, down from 5.3 million BTC in late May, indicating that “new money seems to be running out of Bitcoin,” as noted in a report from Cryptoquant.